Manage Funding Cost & Cash Interest

Introduction

This guide explains how negative cash positions are handled within the portfolio accounting platform. When a client’s cash balance becomes negative, they are effectively borrowing funds from the broker (through margin lending or repo), which generates financing costs. To calculate these costs accurately and reconcile them with the broker’s data, the platform displays the following key parameters:

Funding Cost — the actual expenses incurred on negative cash,
Reference Cash Interest — the theoretical interest rate applied to capital,
Interest Differential — the difference between the actual and theoretical values,
Repo Charge — the corresponding figures reported by the broker.

The purpose of this guide is to provide Portfolio Managers, Back-office teams and clients with a clear understanding of how financing costs are calculated and how platform values can be matched against broker statements.

Key Terminologies

Term (A–Z)	Definition
Accumulated Funding Cost	Total funding cost accumulated over time based on your portfolio’s daily cash balance. Grows when cash is negative and decreases (or turns positive) when earning interest on positive balances.
Base Rate	Benchmark or reference interest rate used as the starting point for funding cost and cash interest calculations.
Diff	Difference between `Leverage` and `Repo Charge`. Highlights discrepancies between funding, interest, and repo costs. Difference between `Leverage` and `Repo Charge`. Highlights discrepancies between funding, interest, and repo costs.
Funding Cost	The platform calculates a small daily cost based on your position value. If your position value is positive: Daily Funding Cost = – Position Value × (Base Rate + Funding Spread) / 365 If your position value is negative: Daily Funding Cost = – Position Value × Base Rate / 365
Funding Spread	Additional percentage applied to or deducted from the base rate by the custodian, adjusting the final funding rate.
Leverage	Difference between `Funding Cost` (always considered negative) and `Reference Cash Interest`. Indicates the net effect of leverage on the portfolio.
Reference Cash Interest	Benchmark interest earned on positive cash balances: `(AUM × Base Rate / 365 / 100)`. Helps compare actual earnings against the custodian-defined rate.
Repo Charge	Daily financing cost applied to repo (repurchase agreement) transactions. Calculated as the sum of `NetAmountPFCcy` for transactions with subtype = FEE MARGIN.

👉 New to some terms? Check our full Platform Glossary for quick definitions.

How Funding Cost & Cash Interest Works

View and manage funding cost and cash interest information from three key locations:

1. From Custodians Page

Navigate to Custodians > Select Custodian > Find Funding Rates tab.
Enter the required fields and click the + icon to add a New rate or use the three-dots (…) menu to Edit or Delete an existing one.

Detailed Fields Explained Here:

Field	Meaning	Example Value
Date	The effective date on which the funding cost or interest rate applies.	2025-01-01
Currency	The currency for which the funding rate and cash interest calculations are applied.	USD
Base Rate, %	The benchmark reference rate provided by the custodian. Used as the base for interest or funding calculations.	5.30
Funding Spread, %	The additional percentage added by the custodian over the base rate to calculate your total funding cost.	1

Input values can have up to two decimal places.

📎 To learn more about Custodians, click here.

Once added, these inputs define how your daily funding cost or cash interest will be calculated for portfolios' bank accounts using this custodian.

To Check the Rate: Open Bank Accounts (under Accounts) > locate the Custodian field > open the Custodians tab to view the rates.

2. From Portfolios Page

Go to Portfolios > Select a Portfolio > Find Funding Cost & Cash Interest tab.

The following table appears with calculations.
Here, you can see the portfolio-level impact by:
- Viewing daily and accumulated funding values
- Reviewing interest calculations across different dates
- Tracking how your portfolio’s cash activity impacts interest

Detailed Fields Along with Calculations Explained Here:

Field	Meaning / Calculation
Bank Account Id	Internal platform ID of the bank account linked to the portfolio, used for tracking and calculations.
Bank Account	Name of the bank account where your cash balance is maintained and funding cost or cash interest is applied.
Ccy (Currency)	Currency in which funding cost, cash interest, and related calculations are performed.
Date	Value date for which the funding cost or cash interest is calculated.
Funding Cost	Charge for holding a negative cash balance on this date. Calculated as `(Non-Cash Position Value × (BaseRate + FundingSpread) / 365 / 100)` and recorded as a negative value.
Reference Cash Interest	Interest that would have been earned on a positive cash balance: `(AUM × BaseRate / 365 / 100)`.
Leverage	Difference between `Funding Cost` (negative) and `Reference Cash Interest`. Represents the net leverage effect.
Repo Charge	Daily financing cost applied for repo transactions: sum of `NetAmountPFCcy` for transactions with subtype = FEE MARGIN.
Diff	Difference between `Leverage` and `Repo Charge`. Highlights discrepancies between funding/leverage and repo costs.

3. From Positions Page

Access positions via Portfolios > Select Portfolio > Positions tab.

Or,

Positions from main menu.

Each position now includes Funding Cost and Cash Interest fields, automatically distributed based on the portfolio’s calculations.

Detailed New Fields Explained Here:

Field	Description	Calculation / Formula
AccumulatedFundingCost	The cumulative total of all funding costs attributed to the position.	Sum of daily funding costs applied to this position.
TotalEffectivePnlAllTimeBaseCcy	The total effective profit or loss for the entire trading period, in base currency.	`totalEffectivePnlAllTimeBaseCcy = totalPnlBaseCcy + accumulatedFundingCost`